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The craft beer movement in the US has enjoyed extraordinary success at the expense of Big Beer, rising from 3.6% market share by volume in 2006 to 12.3% in 2016.

This growth occurred for five main reasons: growing consumer interest in all things artisanal, lackluster national and regional beer brands, a more favorable regulatory environment, the relative low cost and ease of brewing on a small scale, and the social nature of beer consumption providing market momentum for “in” craft brands.

Craft breweries are now becoming victims of their own success as market maturation causes growth to tap out. Also, Big Beer has finally learned the mantra: If you identify a trend, ride it, don’t fight it, and acquired a number of craft breweries accordingly, further dampening independent craft beer’s growth.

Craft beer’s success in the US has encouraged new craft brewers to challenge beer conglomerates in markets from China to Ireland. In an analogous trend, craft spirits are gaining popularity due to many of the factors that allowed craft beer to first flourish in the US, leading some to predict that craft spirits could achieve similar market share.

The big alcohol conglomerates, however, will likely not again be passive in response to the threat, making the growth path for independent craft beer and spirits harder, though not impossible.

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Craft. Beer. Seldom do two things go so well together. In recent years, the potential of this pairing has been much more than gustatory; many beer-loving entrepreneurs have realized the economic potential of this pairing as well. In fact, the growth of craft beer in the US over the last decade has been nothing short of extraordinary—in a US$100+ billion industry that had been consolidating for decades, craft breweries rose from a paltry 3.4% market share (by volume) in 2006 to 12.3% in 2016. The surge was so pronounced that, in 2016, a new craft brewery opened in the US on average every 11 hours. There are now around 5,500 craft breweries in the US and, though some of their names flout beer branding convention—Cellar Rats, Evil Twin, Rogue Ales, Dogfish Head, Against the Grain, Brew Cult, Hopping Gnome, and Wooden Robot are a few examples—they mean business.

Though “craft” beer may be here to stay, the vibrant independent craft breweries that have reshaped the industry may have a shorter shelf life. Despite their phenomenal success thus far, American craft brewers today face three major impediments to growth: the move of “Big Beer” into their market, limits to their natural consumer base, and, perversely, the curse of their own success. With these challenges coming to the fore, some beer industry analysts have declared that “peak craft” is now behind us, at least in the US.

Unfortunately for independent craft brewers, this thesis is beginning to be borne out in industry production data. Whereas craft beer enjoyed year-on-year sales growth of 21.3% in 2014, this declined to 14.3% in 2015, then to 6.2% in 2016, and in 2017 looks likely to fall further still. The number of microbrewery and brewpub openings has also been tapering off since 2014, albeit more slowly. In addition, in 2016, existing beers accounted for more of overall volume growth than new beers, a sign that new breweries are struggling to gain a foothold.